Home Buying Made Simple: Frequently Asked Questions

Navigating the home buying journey is much easier when you know what to expect at each step. This guide answers the most common questions buyers have from initial preparation through closing day. If your question is more about dollar figures than process, check out this guide to estimating closing costs.

Your Guide from Pre-Approval and browsing to moving day

How do I prepare my finances before searching for homes?

Before touring properties, establish your budget and secure financial pre-approval to ensure sellers take your offer seriously.

• Obtain Loan Pre-Approval or Proof of Funds: If financing, get a pre-approval letter from a lender. If paying cash, secure a proof of funds statement from your financial institution. If you’re not sure where to get started with this, shoot me a message and I’ll help you with the next step.
• Gather Financial Documents: Organize tax returns, bank statements, and employment documentation for your lender.
• Assess Your Debt and Monthly Budget: Analyze existing debts to determine a comfortable monthly mortgage payment.
• Protect Your Credit: Avoid opening new credit accounts, making major purchases, or changing jobs prior to closing.

How do we search for and select the right home?

Finding the right home involves aligning your lifestyle needs, budget, and location preferences.

• Define Must-Have Features: Identify the top features, layout, and style of home required for your lifestyle.
• Target Preferred Locations: Consider work commutes, neighborhood dynamics, and proximity to schools, shopping, or entertainment.
• Tour Potential Homes: Filter available listings against your criteria and schedule in-person tours of your top properties.

What happens when I am ready to make an offer on a home?

When you find the right property, your agent drafts a formal Purchase Agreement outlining your price, contingencies, and timeline.

• Provide Key Offer Terms: Decide your offer price, the size of your earnest money deposit, the amount of your down payment, preferred closing date, and required contingencies.
• Sign and Send Your Offer: In most cases you can expect to hear back from the seller within a day or two.
• The Seller Responds
  • Acceptance: If accepted, contract timelines begin for earnest money, inspections, and loan processing.
  • Counteroffer: The seller may propose revised terms (such as price or closing date), which you can accept, reject, or counter.
  • Rejection or Expiration: If rejected or allowed to expire, the search continues for another home.

What is earnest money, and when do I pay it?

Earnest money is a good-faith deposit paid shortly after an offer is accepted, demonstrating your commitment to the transaction.

• Deposit Handling: Funds are held safely in an escrow account until closing.
• Application at Closing: Upon closing, the deposit applies directly toward your down payment or closing costs.
• Contingency Protection: If you exit the contract under a valid contingency (such as inspection or financing), your deposit is refunded.
• Contract Breach: If you walk away outside of contractual contingencies, the seller retains the deposit.
• Homeowners Insurance Window: Use the initial contract period to obtain homeowner’s insurance quotes to ensure coverage meets contingency guidelines.

How do home inspections work, and what can I negotiate?

A home inspection provides an objective review of the property’s physical condition to identify significant issues before closing. It’s always a good idea to get a whole house inspection for your own clarity and peace of mind before buying your next home.

Indiana is a disclosure state, meaning that sellers of residential property are required by law to disclose any defects to the best of their current, actual knowledge. But sellers don’t always know the condition of the home and I highly recommend ordering a whole house inspection as part of your due diligence prior to closing.

• Whole-House Inspection: A licensed inspector evaluates major structural, mechanical, and safety systems.
• Specialty Inspections: Depending on the property, the inspector may recommend additional tests or the buyer may order them to err on the side of caution. Common add-ons include pest inspections or inspections of the roof, electrical systems, heating and cooling systems, well and septic systems, and/or sewer lines. Some buyers opt to test for radon, mold, and/or lead based paint.
• Focusing on Defects: Negotiations focus on major defects, health/safety issues, and structural concerns rather than cosmetic flaws or routine maintenance.
• Seller Response Window: Buyers submit a prioritized inspection response, allowing the seller time to obtain contractor estimates and respond.

What happens during the appraisal and final loan approval?

Your lender evaluates the property’s value and completes final underwriting before issuing full loan approval.

• Appraisal at Contract Value: The home appraises at or above the purchase price, allowing financing to proceed as planned.
• Conditional Appraisal: The appraiser requires specific repairs before final sign-off. Buyer and seller negotiate who will complete the repair prior to closing.
• Low Appraisal: If the appraised value comes in below the contract price, options include renegotiating the price, bringing additional cash to cover the gap, challenging the appraisal, or exercising a financing contingency.

What needs to happen right before closing day?

The final days before closing involve finalizing financial transactions, verifying property condition, and transferring service accounts.

• Review Closing Disclosure: Lenders provide a final statement of loan terms, interest rates, and total closing costs at least 3 business days before closing.
• Transfer Utilities: Schedule electric, gas, water, and trash utilities to transfer into your name on or before closing day.
• Wire Closing Funds: Arrange a secure wire transfer to the title company for the required balance.
• Complete Final Walkthrough: Inspect the home 12 to 24 hours before closing to confirm required repairs were completed and the property remains in good condition.

What should I expect on closing day?

Closing day is when legal ownership of the property officially transfers to you. Make sure you ask your closing agent if they will record the deed and file for a homestead exemption on your behalf. Also ask if any follow-up is needed on your part.

• Bring Required Identification: All buyers must attend the closing appointment with valid government-issued photo identification.
• Sign Documentation: Execute final mortgage documents, title papers, and legal transfer forms.
• Ongoing Client Support: After receiving the keys, your real estate agent remains a continuous resource for home equity questions, service vendor recommendations, or future real estate planning.

Written by Logan Wishart, a licensed real estate agent in Indiana (license RB25000539) with the Bomkamp Team at Irish Realty, serving buyers and sellers across South Bend, Mishawaka, Granger, Osceola, New Carlisle, and Lakeville.